The Limited Recourse Loan Agreement is primarily used in project finance and asset-based lending transactions where lenders agree to limit their recourse to specific assets, cash flows, or collateral rather than the borrower's full asset base. This type of agreement is particularly common in infrastructure projects, real estate developments, and other large-scale financing arrangements in South Africa. The document must comply with South African banking and security laws, including the National Credit Act and Financial Intelligence Centre Act. It typically includes detailed provisions regarding the loan facility, interest calculations, repayment terms, security arrangements, and most importantly, explicit limitations on the lender's recourse rights. This structure allows borrowers to ring-fence certain assets or projects while providing lenders with clear rights over specific collateral.

1. Parties: Identification of the lender(s) and borrower(s), including registration details for corporate entities

2. Background: Context of the loan arrangement and description of the limited recourse nature of the facility

3. Definitions and Interpretation: Definitions of key terms, including specific definitions related to limited recourse assets and interpretation rules

4. The Facility: Details of the loan amount, purpose, and availability period

5. Limited Recourse Nature: Explicit provisions defining the limited recourse nature and identifying the specific assets against which recourse is available

6. Drawdown: Conditions and procedures for drawing down the loan

7. Interest: Interest rate, calculation methods, and payment provisions

8. Repayment: Repayment terms, including scheduled repayments and final maturity

9. Security: Description of security over the limited recourse assets

10. Representations and Warranties: Standard and specific representations regarding the limited recourse assets

11. Covenants: Positive and negative undertakings, including specific covenants relating to the limited recourse assets

12. Events of Default: Default triggers and consequences, modified to reflect limited recourse nature

13. Enforcement: Rights and limitations on enforcement against the limited recourse assets

14. Payments: Payment mechanics, currency, and tax provisions

15. Changes to Parties: Assignment and transfer provisions

16. Notices: Communication procedures between parties

17. General Provisions: Miscellaneous legal provisions including governing law and jurisdiction

18. Execution: Signature blocks and execution formalities